By Callum Keown
British stocks fought back on Thursday as investors returned to riskier assets, but gains were held back by a buoyant pound.
The FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.25% edged 0.1% higher as a stronger pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0440% meant the blue-chip index failed to enjoy the same gains as other European indices.
The domestically focused FTSE 250 /zigman2/quotes/210598417/delayed UK:MCX +1.10% rose 0.6%, capitalizing on improved global sentiment as bond yields moved off record lows and Chinese exports received a surprise boost.
What’s moving the markets?
An unexpected rebound in Chinese exports in July, driven by the EU, boosted Asian markets overnight after U.S. stock markets closed higher.
Exports rose 3.3%, beating expectations of a 1% decline, but shipments to the U.S. fell 8% from the previous year.
The prospect of Chinese representatives visiting Washington for trade talks next month added extra support as London markets opened higher.
China’s central bank set the daily midpoint for the yuan below 7 per dollar, the weakest level since 2008, but markets were unmoved as it remained stronger than expectations.
Michael Hewson, chief market analyst at CMC Markets, said: “For this rebound to gain further momentum we would need to see evidence of a softening of the rhetoric around trade, and a willingness on the part of both parties to dial back their current positions.”
The yield on the U.K. 10-year gilt slumped on Wednesday as central banks in Thailand, New Zealand and India cut rates more aggressively than expected, warning of a protracted global growth slowdown.
But yields moved off record lows on Thursday as investors, who had flocked to havens, returned to riskier assets.
Which stocks are active?
Drinks bottler Coca-Cola HBC /zigman2/quotes/200383650/delayed UK:CCH -0.82% declined 3.6% as operating profit fell 4.9% to €288.9 million ($323.8 million) in the first half of 2019. The company blamed unseasonably cold and wet weather in Europe earlier this year as it fell short of its own estimates of €319.8 million operating profit.
Hargreaves Lansdown /zigman2/quotes/201025857/delayed UK:HL +2.22% soared 9.6% after the investment platform reported strong revenue and profit in its full-year results. The investment management firm also apologized to its clients for keeping Neil Woodford’s flagship fund, which has been frozen since June, on its favorite-funds list.